Motricity CEO Sees More Tiered (Phone) Pricing Plans Ahead

From smartphones to tablets, Wi-Fi to 3G/4G: I cover telecom & mobile.

Mobile data provider Motricity's job is to make it quick and easy for people to access the Internet from their cellphones. Its biggest customers are wireless carriers, including AT&T, Verizon Wireless, Sprint Nextel and T-Mobile in the U.S.

Those connections mean the Bellevue, Wash.-based company is well-positioned to comment on one of the most recent--and potentially far-reaching--changes in the U.S. telecom industry: tiered pricing for mobile data plans.

AT&T made the move to these usage-based plans, which charge subscribers based on the amount of bandwidth they consume, in early June. Analysts expected other carriers would rush to follow, but Verizon, Sprint and T-Mobile have stuck to offering unlimited data plans--for now.

Ryan Wuerch, Motricity's chief executive, anticipates that will change soon. "Once a big player like AT&T does tiered pricing, the rest will follow," he said in an interview. "If you look at it from an economic perspective and at the network constraints, it just makes sense."

Outside the U.S., tiered pricing is the norm, Wuerch added.
It is simply packaged differently, as pay-as-you-go wireless service. "Prepaid service is just another way of metering usage," said Wuerch.

Wuerch is a fan of tiered plans. Since much of Motricity's technology focuses on streamlining and personalizing the mobile Internet, Wuerch believes the company will benefit from the trend. Motricity is already working with AT&T to develop a mobile marketplace that will be deployed across AT&T phones this fall.

He declined to share details about the AT&T service, but said one idea is to collect information on users' preferences and purchasing habits and combine it with the data AT&T already has about its subscribers to deliver personalized recommendations directly to phones. For instance, someone who bought a chess application might receive a notification about a new chess-playing manual from a bookseller. Pushing intelligent recommendations to users will help them cut down on the amount of time they spend browsing online and thus their bandwidth costs, said Wuerch.

Of course, a pervasive recommendation service--no matter how helpful--could annoy consumers, particularly those that value privacy. Wuerch contends that carriers are better stewards of sensitive information than competitors like Google. In a recent survey commissioned by Motricity, 80% of respondents said they trusted their carriers to safeguard their personal data while only 20% preferred Google, said Wuerch.

In Motricity's view, greater carrier involvement, like tiered pricing, is more a question of when than if, anyway. "Carriers spent $50 billion on infrastructure and spectrum last year," said Wuerch. "If carriers are kept out of the mobile Internet, they won't be able to keep investing in their networks."